Brazil: IBM to invest at least US$100m in services by 2006

IBM says it will invest at least US$100m in services in Brazil by 2006. The US computers and office products conglomerate considers Brazil, along with China, India and Russia, a priority market or “emerging business opportunity”. Rogerio Oliveira, IBM’s chief country officer in Brazil, is currently reviewing his options to decide whether to expand via acquisition or to launch a new business unit.

Last year IBM acquired most of Embratel’s (US) information technology (IT) division. However, the company has denied its intention to close a similar deal with Cobra, Banco do Brasil’s IT unit.

The Brazilian IT market registered sales of US$8.8bn last year, a decline of 8.1% compared with 2002, according to IDC, a US technology consultancy. However, IBM says it experienced double-digit growth--27% in services, 31% in hardware, 23% in software--during the period. The company anticipates strong growth again this year, when the overall market is expected to expand by 5.7% to US$9.3bn, according to IDC.

Consequently, IBM’s Brazilian subsidiary plans to hire some 3,000 staff within the next two years, mostly in the area of services, growing the size of its current workforce by half.

IBM is enjoying strong demand for outsourcing from multinational companies in the region. Last September it signed a ten-year, US$400m contract with Procter & Gamble (US) to manage its human resources technical support in the Americas from Costa Rica. (P&G has two other regional centres, in the Philippines and in the UK.)

Source: Business Latin America.